Monthly Archives: February 2016

Former Prime Minister Gro Harlem Brundtland of Norway (and then special envoy for the United Nations) was invited by the UN to create and manage a “World Commission on Environment and Development (“WCED”), which over time became known as the “Brundtland Commission.” The commission gave the world a framework for moving forward on what would become known as “sustainable development.”

The commission report (in 1987) was titled, “Our Common Future,” paved the way for the world leader gathering in 1992 – the “Earth Summit.” Her work continued after the commission work concluded; she led the Norwegian government peace initiative in the Middle East, bringing the PLO’s Yasser Arafat and Israel’s Yitzak Rabin. (This led to the “Oslo Accords.”) Ms. Brundtland moved on to the World Health Organization (WHO) as Director-General.

Then it was on to be one of the UN’s Special Envoys for Climate Change. And to close comradeship with President Nelson Mandela and Bishop Desmond Tutu and other leaders as “the Elders,” bringing attention to pressing societal issues. She is a fascinating – and inspiring – woman in key global and regional leadership roles.

So what are her thoughts on the current state of sustainability? How has the concept moved forward – and after 28 years, what has the world accepted (of the thoughts of Our Common Future)? (The main message remains: Our generation has a responsibility to address the destiny of the planet.) How does she view the meetings in Paris (COP 21)?

She shares her views on these questions and on electric-powered cars and the beneficial impact on public health. How can countries encourage the adoption of EV’s? (Remember, her home country of Norway is a major oil-producing nation – pumping fossil fuel for powering of internal combustion engines.)

Thinking back to 1987 and the commission work – that is not so long ago, is it! The current generation of undergrad and grad students focused on the many dimensions of sustainable development, and after graduation moving into positions in companies, governments, civil societies, will be shaping the direction of those organizations…advancing the seminal work of the Brundtland Commission and many others inspired by the commission’s work.

Many nations have created what can be defined as a “Sovereign Wealth Fund,” which hold assets in portfolio that are supposed to benefit the entire population, and usually, future generations of the country’s citizens. The first such fund was launched in 1954 by the oil-producing nation of Kuwait. Today, the largest such “SWF” is that of Norway – officially, the Norway Government Pension Investment Fund – with “wealth” now approaching US$1 trillion in Assets Under Management.

The Fund, managed by Norges Bank, invests in literally thousands of public companies. Consider: The fund invests in 9,000 companies in 75 countries (1.3% of the world’s listed companies; 2.4% of Europe’s listed companies). The funds come from Norway’s North Sea oil royalties.

This is an activist investor: Last year the SWF divested shares in 73 companies because of environmental and governance issues – the news comes from the Fund’s second annual sustainable investing report. The Norway SWF is an activist investor, voting against 9,000 company-backed proxy resolutions (including votes at Apple, ExxonMobil, Sanofi, Anheuser-Bush InBev, Toyota, and General Electric).

As the Financial Times’ Nordic & Baltic reporter Richard Milne explains in his report, “The disclosures come as part of the oil fund’s second report on responsible investing…detailing its aspiration to use its growing weigh in financial markets to push companies towards good corporate behavior.”

The G&A Institute team has been monitoring SWFs for almost 10 years, as the assets – and influence — of this important sector of the institutional investment community grows and grows. Not many SWFs could be characterized as sustainable & responsible investors, but the Norway fund example is at least favorably referenced by some other national funds when they describe their own “sustainable investing” activities.

Collectively, the SWF community owned/managed US$7 trillion in AUM as of December 2015, according to the Sovereign Wealth Funds Institute. (Norway Fund was $825 billion; Abu Dhabi, long the largest SWF, was at $773 billion.)

Other large SWFs are owned by governments of China; Korea; Qatar (and other oil-producing states). Oil – fossil fuel, legacy fuel – is an important factor in building this type of national wealth. Norway’s fund states: “The [Fund] is saving for future generations in Norway. One day the oil will run out, but the return on the fund will continue to benefit the Norwegian population.”

G&A’s SustainabilityHQ web platform tracks the activities of the world’s SWFs and presents headlines of fund activities. The profiles of the SWFs is part of our asset owner/manager profiling resources (part of G&A’s “Big Data”) used for customized research for clients. Norway is our north star — look at what this Nordic giant is doing and “imagine” in John Lennon’s terms, what might be if many other SWFs followed its lead in responsible investing!

Read more about the Norway Sovereign Wealth Fund in the story below. And tune in to SWFs – we track news of this category of asset owner/manager every day using our SHQ platform tools.

Norway’s oil fund sells 73 stakes on sustainability concerns(Thursday – February 04, 2016)Source: FT.com – Norway’s $810bn oil fund sold out of 73 companies last year due to environmental and governance issues as the world’s largest sovereign wealth fund stepped up its work on responsible investing.

Graham Sinclair is one of the influentials, the thought leaders in sustainability. He shares his views on “mainstreaming sustainable investment” with us on the Triple Pundit platform. He sees 2016 as the year of the “new normal” for brand name asset owners and their managers to embrace ESG factors in their decision-making. An example is the CDP signatory base of now 822 financial institutions with US$95 trillion in Assets Under Management (AUM). Another strong signal is the Institutional Investors Group on Climate Change – 120 members with 13 trillion Euros in AUM. And, PRI with 302 asset owners and 958 investment managers with $59 trillion AUM.

There is a lot going on in the mainstream investing community that Graham Sinclair walks us through. We encourage you to read his commentary and share it internally (with your investor relations team, the CEO and CFO, and others).

G&A Institute will be sharing our views on the trends that we’re closely monitoring in sustainability — featured over the next few weeks.

Not Too Big to Fail: How Mega Investment Firms Do Sustainability(Thursday – January 28, 2016)Source: Triple Pundit – Mainstreaming sustainable investment: If the many investor initiatives aimed at corralling investors toward sustainability had not already made environmental, social and governance (ESG) the new normal, 2016 should do it.

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Each winter for the past four decades leaders in government, business, media, academia, and civil society gather beneath snow-capped mountains in the mile-high town of Davos, Switzerland to ponder and debate the present and future of our world society. This year’s gathering (2,500 in attendance) focused in good measure on the “Fourth Industrial Revolution.”

The first revolution being use of water and steam to move from hand-to-mechanical means of production; the second was the coming of electronic wonders in mass production; the third is use of IT and electronics to automate and communicate and transfer information via the internet. The fourth? Automation… artificial intelligence… robots… drones… interactive technologies… virtual reality… enabled disruption… Everything we take for granted is in upheaval. For humans, will it be competition (with robots) or collaboration? They debated that in Davos this month.

One consensus seemed to be that science, in leading the way into the Fourth Revolution (as it did the past three), will need better use of talent – like more women in the field. The image of the lone scientist in a white coat working at the lab table is passé; today, discovery and innovation is more collaborative and inter-disciplinary in nature. Governments need to play a larger role, for staying power (long-term results) given the frequent short-term focus of the business and investment community. Discovery needs to be nurtured over a longer period to bring us breakthroughs like GPS, space satellites and organ transplants.

And on being human and humane – the RED campaign, organized by singer Bono of U2 and others 10 years ago, announced at Davos that US$350 million has been raised to help those with AIDS (providing anti-retroviral therapies). RED campaigners aim for an AIDS-free generation as soon as possible. Well done to those 65 companies who helped RED raise the funds.

Below is a snapshot of items for you out of Davos -– always interesting reading!

Who will win Davos 2016?(Wednesday – January 20, 2016)Source: Quartz – Sure, the annual World Economic Forum meeting in Davos is the premier gathering of global power brokers, a place for the great and the good to address the thorniest issues facing society. But it is also an unparalleled display of…

This is where the real deals at Davos are done(Thursday – January 21, 2016)Source: BBC – Call it the Davos Fringe Festival. Increasingly this “fringe”, the privately-organized events, are taking the attention of attendees away from the Congress Centre and the WEF’s carefully curated program. Invitations to private…

What are the 10 biggest global challenges’(Friday – January 22, 2016)Source: World Economic Forum – World Economic Forum – The scale of the employment challenge is vast. The International Labour Organization estimates that more than 61 million jobs have been lost since the start of the global economic crisis in 2008, leaving…

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